NH Education Funding

Education funding is always a passionate issue. To isolate some key issues, I am going to restrict this to three items.

  1. How apportionment formulas are created
  2. State barriers to flexibility
  3. Why the sanctity of a funding source is a problem in NH

Apportionment formulas are voted on by the school district. If you are the one town in a multi town district who objects to the formula, you’re out of luck. Perhaps we could give veto power to towns over the formula approval. The risk is that then a town, or small majority can hold the entire process hostage in order to gain something. In a perfect world, a consensus would be formed in order to end the process. In the House, we have some defined deadlines for certain actions. If we are in danger of not meeting them, we get locked in. Under a “Call of the House”, we actually can’t go to the bathroom without a security escort to ensure that we don’t leave. Perhaps a similar process can be adopted by a committee in a school district tasked with creating a fair formula.

Once you are in a district, it is very hard to leave. State laws should be passed making this process easier. I am not advocating pulling out of SAU60. Fall Mountain is a pretty good school district. Having the ability to easily say “I’m not being treated fairly and I am shopping elsewhere” does change the conversation, and weight of the conversation with a goal towards reaching consensus. State requirements for apportionment formulas should be updated to prevent the type of spiderweb that we have here. Every person should be able to easily understand the formula. The state requirement should allow only for a mix of ADM and Equalized Valuation.

Dedicated funds are kind of like unicorns. We’ve all heard of them, but I haven’t actually seen one. They are created by bills in the Legislature. The conversation when creating one usually goes like this. “Okay voters, you are upset about this problem. We need money to fix it. Give it to us and we promise to spend it only on this problem.” The duration of that promise is the rub. Things created by bills can be undone by other bills with a simple majority vote. The effect is that 2 years later when the next Legislators are figuring out the budget, they can grab that money with an amendment to any budget bill. We have had turnover exceed 100 members, so institutional memory of those promises is diluted. How big a problem is this? It has unfortunately strong bipartisan resistance.

Charlestown’s former State Senator David Pierce sponsored a Constitutional Amendment bill in 2013 that would have required that dedicated funds be spent on their intended purpose. It passed the Senate (Republican) and was defeated in the House (Democrat). I tried to resurrect it during a Special Session. Leaders of both parties tried to prevent me from even being able to speak about it. I won that fight but lost the vote on the amendment. In 2015, I submitted the bill again with sponsors from both parties. This time, it was defeated in the House (Republican). So, if we are going to create a new funding source for education, we have to do this first. Otherwise, you only get an 18 month guarantee that the money goes where it was intended.

Here are our current sources of revenue.


Here is where they go:


You can drill into these numbers in more details at Where The Money Comes From and Where Your Money Goes

Included in “education” is Police Standards and Training, UNH, and a variety of other things that mean something besides “dollars to your school district”. Conversations about education funding would be easier if we isolated and sanctified revenue streams targeted towards education. There is not a lot of straight line transparency.

We would also benefit from diversifying the revenue streams. The Moose Plate program is successful in raising a lot of money for conservation programs and LCHIP. We can do something similar for education. We can create tax incentives to allow businesses to put money into the education trust fund. We can create a 501c3 that allows individuals to donate money to education and deduct it from their federal taxes. A portion of the rooms and meals tax could be dedicated to education, allowing tourists to help fund our schools. There are things that can be done. Gaining consensus and picking them off one step at a time is the key. Ensuring that these new funds offset property taxes is also a key point.

Are we getting good value at Fall Mountain? The state average for per-pupil cost is $15,397.60. Fall Mountain is at $17,212.38, not egregious, but a little high. This is complicated by the fact we also pay the cost of our in town schools.

Source – cost_pup16_17

“Formula: Current operating expenses at the Elementary level based
on percent of expenditures by town; capital expenses at the Elementary level shall be apportioned to the town in which the capital costs are incurred. All expenses at the High School level based 100% on most current ADM.” This paragraph translates to a lot of pages when it comes to actual implementation.

What can we do locally?

  • Fight for a simpler formula. Even if it doesn’t improve our circumstances, at least we can move forward in a more unified fashion if we can all easily understand it.
  • Support the work of the School Research Committee.
  • Go to School Board Meetings. When I go, they assume I have some agenda because I’m your Representative. Just as it is in House committee hearings, the words of the voters, regular people living their lives always swings the most weight. You really do have the most power.

What can we do at the state level?

  • Formulas like Fall Mountain’s should be eliminated. We should require all districts to have a simple formula involving only ADM and Value. You should not need a tax attorney and an accountant to understand your formula.
  • Towns should be given more leverage to object to bearing the brunt of the cost when outvoted by other towns, to those town’s advantage.
  • The formula adoption process should have rules designed to create consensus, even if we have to force it.
  • Revenue streams to public schools should be isolated and placed off limits.
  • The education revenue portfolio should be diversified. When alternative revenue streams do well, the surplus should be dedicated to reducing property taxes. It is hard to make a case for more money in total when New Hampshire is consistently in the top 25% of states in per pupil spending (source – Education Spending Data by State ). It is easier to make the case that we need a more diversified approach to providing those funds.
  • Consideration should be given to eliminating state modifiers to payouts and send one dollar amount to each municipality per pupil.

Those are things that may help short term. In the long run, we need to think of education funding from a blank page perspective. If we could start all over again and design an education funding system from the ground up, what would it look like. The Claremont Decision requires only that the State fund some level of education. It doesn’t specify how we do it. The statewide property tax was a bandaid, and a poor one. We need a brand new diversified approach that does not depend on one or two sources, or the state is just taking the money out of your other pocket and calling it a solution.



About Rep. Steven Smith

Steven Smith is a member of the New Hampshire House of Representatives, serving his 7th term. Rep. Smith currently represents Charlestown, Newport, and Unity. Rep. Smith is the Deputy Speaker of the NH House.
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